Fiscal Year 2017 Analyst and Investor Presentation August 2017 Tony Price Chief Executive, Midway Limited
Disclaimer This presentation has been prepared by Midway Limited ACN 005 616 044 ( Midway or the Company ). The information contained in this presentation is current at the date of this presentation. The information is a summary overview of the current activities of the Company and does not purport to be all inclusive or to contain all the information that a prospective investor may require in evaluating a possible investment. It is to be read in conjunction with the Company’s disclosures lodged with the Australian Securities Exchange, including the Company’s Appendix 4D and Half Year Report for the period ended 31 December 2016 lodged with the Australian Securities Exchange on 23 February 2017. The material contained in this presentation is not, and should not be considered as, financial product or investment advice. This presentation is not (and nothing in it should be construed as) an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any security in any jurisdiction. This presentation is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor which need to be considered, with or without professional advice, when deciding whether or not an investment is appropriate. This presentation contains information as to past performance of the Company for illustrative purposes only, and is not – and should not be relied upon as – an indication of future performance of the Company. To the maximum extent permitted by law, Midway makes no representation or warranty (express or implied) as to the accuracy, reliability or completeness of any information contained in this document. To the maximum extent permitted by law, Midway will have no liability (including liability to any person by reason of negligence or negligent misrepresentation) for any statements, opinions or information (express or implied), arising out of, contained in or derived from, or for any omissions from this document. Forward looking statements This document contains certain “forward-looking statements”. The words “anticipate”, “believe”, “expect”, “project”, “forecast”, “estimate”, “outlook”, “upside”, “likely”, “intend”, “should”, “could”, “may”, “target”, “plan” and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance, including Midway’s FY17 outlook, are also forward-looking statements, as are statements regarding Midway’s plans and strategies and the development of the market. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Midway, which may cause actual results to differ materially from those expressed or implied in such statements. Midway cannot give any assurance or guarantee that the assumptions upon which management based its forward-looking statements will prove to be correct or exhaustive, or that Midway’s business and operations will not be affected by other factors not currently foreseeable by management or beyond its control. Such forward-looking statements only speak as at the date of this document and Midway assumes no obligation to update such information. Non-IFRS information This presentation includes certain financial measures that are not recognised under Australian Accounting Standards (AAS) or International Financial Reporting Standards (IFRS). Such non-IFRS financial measures do not have a standardised meaning prescribed by AAS or IFRS and may not be comparable to similarly titled measures presented by other entities, and should not be construed as an alternative to other financial measures determined in accordance with AAS or IFRS. Recipients are cautioned not to place undue reliance on any non-IFRS financial measures included in this presentation. The non-IFRS information has not been subject to audit or review by Midway‘s external auditor. All references to dollars are to Australian currency unless otherwise stated. 2
Solid full year 2017 results FY17 results in line with expectations •Sales of $209.2 million and EBITDA of $24.9 million •Pro forma NPAT of $17.3 million, exceeding the pro forma forecast •Statutory net profit before tax was $19.9 million and NPAT was $14.9 million, down 42.5% on a pcp basis due to the sale of the tree crop and no proceeds from log sales •Fully franked final dividend of $0.09 cents per share for a total dividend for the year of $0.18 cents per share Cash flow positive and strong balance sheet •Strong working capital position •Low credit risk on receivables •Meeting all financial covenants Positive international fundamentals •Export demand is forecast to remain strong, especially in China, with future global supply constraints contributing to positive pricing trends •Midway has continued to cement key trading relationships with our export customers, especially with pulp and paper producers in China and Japan 3
Business unit contributions [Pro Forma] Revenue EBITDA NPAT Comments $Am FY16 FY17 FY16 FY17 FY16 FY17 Geelong performed well throughout the year, with slight Midway decrease in sales volume offset by higher dry fibre content, 184.0 182.6 25.9 24.1 15.2 13.8 Midway 100% better USD FOB sale prices and a favourable exchange rate SWF SWF had strong performance, slightly better than the 9.4 5.4 5.7 2.8 Midway 51% 85.5 77.6 prospectus forecast Mitsui 49% Geelong and SWF offset lower sales volumes from QCE QCE which was adversely affected by lower softwood export 4.0 1.2 2.5 0.7 Midway 90% 16.3 26.6 volumes and adverse weather conditions in northern NSW Graincorp 10% that impacted hardwood harvesting Eliminations (85.5) (77.6) (3.7) (2.3) - - Total 200.3 209.2 35.6 28.4 23.4 17.3 4
Financial Performance $Am FY16 FY17 % Change 0.3% Sales Revenue 208.5 209.2 Other Income 4.6 4.1 (10.9%) Equity Accounted Share of Profits 5.7 2.8 (50.1%) (7.4%) Operating Costs (178.0) (191.2) 40.8 24.9 (39.0%) EBITDA 5.6% Depreciation and Amortisation (3.6) (3.4) EBIT 37.2 21.5 (42.2%) Finance expense (2.0) (1.6) 20.0% 35.2 19.9 (43.5%) Pre-Tax Profit (8.8) (5.0) 43.2% Tax Expense (43.6%) Statutory NPAT 26.4 14.9 Pro forma NPAT 23.4 17.3 (26.1%) 5
Cash Flow $Am FY16 FY17 $Am Change 3.0 16.2 440.0% Operating Cash Flow 51.7 (0.4) (100.8%) Investing Cash Flow Financing Cash Flow (72.7) (12.0) 83.5% Net Change in Cash (18.0) 3.8 121.1% 16.6% Net Debt 19.9 16.6 14.3% Interest Cover 21.7 18.6 6
Balance Sheet $Am FY16 FY17 $Am Change Total Current Assets 39.0 35.7 (8.5%) Total Non-current Assets 117.3 119.1 1.5% Total Assets 156.3 154.8 (1.0%) Total Current Liabilities 4.8% 20.9 19.9 Long Term Debt (1.6%) 30.4 30.9 Total Non-current Liabilities 44.9 43.9 2.2% Total Liabilities 65.8 63.8 3.0% Net Assets 90.5 91.0 0.6% 7
Risk Management Exposure to foreign exchange rates •Active hedging policy in place •Aim to reflect the movement in the AUD:USD rate in timber purchase prices •Timber supply costs are negotiated regularly. Vessel chartering •Effective management of vessel chartering to maximise profit Customer contracts •Focused on maintaining a diversified customer base, while ensuring strong relationships with key customers •Demand from key customers in China and Japan is likely to exceed our existing supply for foreseeable future, demonstrated by fact Chinese hardwood woodfibre imports are up 12.5% in 2017 from the previous year Supply of logs •A number of long term supply agreements with major plantation owners in place •Regularly signing up smaller plantation owners in Geelong and Portland •Large volume of hardwood plantation available for Brisbane 8
Strategic Priorities and Outlook August 2017 9
Strategic Priorities Increasing EBIT over time: Good progress against Strategic Objectives in FY17 1. OPERATING EFFICIENCIES • Economies of scale • Margin expansion • The company has continued to maximise • Favourable demand/ supply dynamics long term supply by replanting across the land portfolio and securing contracts with plantation owners. 2. EXPANSION OF EXISTING BUSINESS • Midway continues to assess opportunities to • Development of Hardwood and Softwood log better utilise existing facilities and acquire exports businesses in key forestry areas in Australia • Better utilisation and expansion of existing infrastructure and overseas. • The Group maintains a disciplined approach 3. ACQUISITIONS to capital management to ensure we maximise shareholder value. • Complementary businesses • Industry consolidation • Domestic and international 10
Recommend
More recommend
